(1) in the inner grooves the stylus travels slower so there is less data to read so less information headroom. (2) with pivoting arms the inner grooves have slightly more non-linear distortion than at the null points. (3) the grooves curve sharper so they are relatively more ’pinched’, and (4) skating forces (related to centrifugal force) are stronger on the tone-arm.
a poorly aligned cartridge will certainly be more out of alignment on inner grooves. so there would be a multiplier effect on the inner groove nasties.
a cartridge not matched to the tonearm is not very relevant to the inner groove issue directly unless it won’t track the groove properly, then the inner grooves might make it worse. it could cause a skip. it depends on the nature of the incompatibility.
a linear tracking tonearm does theoretically eliminate the linear distortion, and longer pivoting tone arms have less geometric distortion; however; those tone arms must be perfectly set-up or they become worse than a relatively well set-up normal length pivoting arm.
so there are compromises with any approach and execution and precision of set-up typically rule the day.
regarding the investment in the tonearm and turntable and it’s effect on this question; it’s not irrelevant and effects ultimate performance and sometimes limits levels of precision set-up choices, but the basic principles still apply. there are not many really modest priced longer pivoting tone arms or linear trackers due to the higher costs of design and build.
less expensive turntables and arms have more noise and are less accurate in their speed so when that is combined with inner groove distortion it can tip the balance of musical enjoyment and that can be an issue. but normally that does not need to happen with a good set-up. i’ve not observed that being an issue. honestly it's been years since i spent time listening to $500 turntables, so i can't say much about them.